alert-icon
Only limited material is available in the selected language. All content is available on the global site.
Wolters Kluwer Navigation
  • Solutions Directory
  • Careers
  • Investors

About Wolters Kluwer

Wolters Kluwer is a global provider of professional information, software solutions, and services for clinicians, nurses, accountants, lawyers, and tax, finance, audit, risk, compliance, and regulatory sectors.

About Us
  • About Wolters Kluwer
  • Strategy
  • Our Organization
  • Management
  • Supervisory Board
  • Value Creation
  • Events
Expert Insights
  • All Expert Insights
  • Health
  • Tax & Accounting
  • ESG
  • Finance
  • Compliance
  • Legal
Get Help
  • Contact Us
  • Login
  • View Solution List
  • eShop & Bookstores
  • Media Center
  • News & Press Releases
  • Solutions Directory
  • Careers
  • Investors
PrimaryNav Button
Wolters Kluwer Logo
Search Wolters Kluwer
    No Suggestion
    WK logo

    Visit our global site, or select a location

    • Americas
    • Europe
    • Asia & Pacific
    Brazil
    Home page:
    • Portuguese
    Canada
    Home page:
    • English
    • French
    Latin America
    Home page:
    • Spanish
    United States
    Home page:
    • English
    Current Page:
    • English
    Belgium
    Home page:
    • Dutch
    • French
    Czech Republic
    Home page:
    • Czech
    Denmark
    Home page:
    • Denmark
    France
    Home page:
    • French
    Germany
    Home page:
    • German
    Hungary
    Home page:
    • Hungarian
    Italy
    Home page:
    • Italian
    Netherlands
    Home page:
    • Dutch
    Norway
    Home page:
    • Norwegian
    Poland
    Home page:
    • Polish
    Portugal
    Home page:
    • Portuguese
    Romania
    Home page:
    • Romanian
    Slovakia
    Home page:
    • Slovak
    Spain
    Home page:
    • Spanish
    Sweden
    Home page:
    • Swedish
    United Kingdom
    Home page:
    • English
    Australia
    Home page:
    • English
    China
    Home page:
    • Simplified Chinese
    Hong Kong
    Home page:
    • English
    India
    Home page:
    • English
    Japan
    Home page:
    • Japanese
    Korea
    Home page:
    • English
    Malaysia
    Home page:
    • English
    New Zealand
    Home page:
    • English
    Philippines
    Home page:
    • English
    Singapore
    Home page:
    • English
    Taiwan
    Home page:
    • English
    Thailand
    Home page:
    • English
    Vietnam
    Home page:
    • English
    Primary Navigation
    • Health

      Trusted clinical technology and evidence-based solutions that drive effective decision-making and outcomes across healthcare. Specialized in clinical effectiveness, learning, research and safety.

      Health Overview
      Solutions
      • UpToDateClinical decision support resource
      • OvidThe world’s most trusted medical research platform
      • LexicompEvidence-based drug referential solutions
      • Sentri7 Clinical SurveillanceTargeting infection prevention, pharmacy and sepsis management
      View All Solutions
      Challenges
      • Optimizing Clinical Workflows
      • Improving Patient Safety
      • Leveraging Clinical Decision Support
      • Reducing Clinical Variation
      View All Challenges
      Expert Insights
      • The next era in pharmacy: Five key insights from the consumer care and cost trends survey
      • Evolving clinical decision support: A guide to discovery-driven transformation in healthcare
      • When it comes to mental health, prioritize wellness for nurses
      • Help your students prepare for NCLEX® with immersive experiences
      View All Expert Insights
    • Tax & Accounting

      Enabling tax and accounting professionals and businesses of all sizes drive productivity, navigate change, and deliver better outcomes. With workflows optimized by technology and guided by deep domain expertise, we help organizations grow, manage, and protect their businesses and their client’s businesses.

      Tax & Accounting Overview
      Solutions
      • Tax & Accounting U.S. HubCentral hub for all U.S. solutions
      • CCH Axcess™ SuiteCloud-based tax preparation and compliance, workflow management and audit solution
      • CCH® ProSystem fx®Integrated tax, accounting and audit, and workflow software tools
      • TaxWise®Tax Preparation Software for Tax Preparers
      View All Solutions
      Expert Insights
      • IRS still has millions of tax unprocessed returns; timeline, what to do, where to check
      • Global Minimum Taxation 101: Exploring the ins, outs, and material impacts of BEPS Pillar Two
      • Disaster tax relief and effects on Individual Retirement Accounts
      • IRS submits report to Congress, plans a 2024 limited Direct File Tax Return Prep pilot
      • 3 steps to developing a successful advisory services model for your accounting firm
      • Tax relief for California victims of storms, winds, flooding, landslides, and mudslides
      • IRA required minimum distribution not satisfied: Penalty and penalty waiver request
      • IRS chief acknowledges audits of black taxpayers may be unfairly high
      View All Expert Insights
    • ESG

      Offering comprehensive tools and expert guidance to companies to help meet regulatory requirements to support sustainability efforts and manage ESG risks efficiently.

      ESG Overview
      Solutions
      • CCH TagetikUnified performance management software
      • OneSumXDiscover our solution for ESG climate risk and regulatory requirements
      • TeamMateSolutions for auditors
      • EnablonSoftware solutions for risk & compliance, engineering & operations, and EHSQ & sustainability
      View All Solutions
      Expert Insights
      • The ultimate buyer’s guide to audit management software
      • Buyer’s guide: Readiness questionnaire
      • A crucial crossroad at railway & transportation risk management – A closer look at identifying hazards
      • The ESG landscape and the challenges facing Internal Audit
      • ESG, public sector, and the role of Internal Audit
      • Perspectives on diversity in a global context
      • New BARC study “The state of ESG & Sustainability Reporting – Challenges, tools and outlook”
      • EMEA Q1 Finance, Risk and Regulatory Update Webinar 2023
      View All Expert Insights
    • Finance

      Our solutions for regulated financial departments and institutions help customers meet their obligations to external regulators. We specialize in unifying and optimizing processes to deliver a real-time and accurate view of your financial position.

      Finance Overview
      Solutions
      • CCH TagetikUnified performance management software
      • OneSumX for Finance, Risk and Regulatory ReportingIntegrated regulatory compliance and reporting solution suite
      • Lien SolutionsMarket leader in UCC filing, searches, and management
      • eOriginaleOriginal securely digitizes the lending process from the close to the secondary market
      View All Solutions
      Expert Insights
      • Enhance your spreadsheets with power & automation
      • Global Minimum Taxation 101: Exploring the ins, outs, and material impacts of BEPS Pillar Two
      • Predictive forecasting within xP&A: Unleash the potential of enterprise plans
      • Communication is the key to change management in the financial industry
      • The hidden costs of financial consolidation
      • 5 Paybacks of automated Financial Close and Consolidation
      • From historical financial management to CCH Tagetik
      • Case Study: The building blocks of financial transformation in 2023
      View All Expert Insights
    • Compliance

      Enabling organizations to ensure adherence with ever-changing regulatory obligations, manage risk, increase efficiency, and produce better business outcomes.

      Compliance Overview
      Solutions
      • OneSumX for Finance, Risk and Regulatory ReportingIntegrated regulatory compliance and reporting solution suite
      • TeamMateSolutions suite for auditors
      • EnablonSoftware solutions for risk & compliance, engineering & operations, and EHSQ & sustainability
      • CT CorporationRegistered agent & business license solutions
      View All Solutions
      Expert Insights
      • Operating a legal department in an economic downturn
      • The effects of inflation on starting a business
      • Buying a small business franchise? Pros and cons of franchising vs. starting a business
      • Choosing the best time to open or close a business
      • Expert discusses preparing for CRA modernization
      • Mortgage lenders believe investment in technology will be key to being able to scale when the market turns: Survey
      • The ultimate buyer’s guide to audit management software
      • Disaster tax relief and effects on Individual Retirement Accounts
      View All Expert Insights
    • Legal

      Serving legal professionals in law firms, General Counsel offices and corporate legal departments with data-driven decision-making tools. We streamline legal and regulatory research, analysis, and workflows to drive value to organizations, ensuring more transparent, just and safe societies.

      Legal Overview
      Solutions
      • Kluwer ArbitrationOnline resource for international arbitration research
      • Enterprise Legal ManagementLegal spend and matter management, AI legal bill review, and analytics solutions
      • LegiswayAll-in-one legal management software for legal departments
      • BizFilings Incorporation services for entrepreneurs
      View All Solutions
      Expert Insights
      • The key questions for measuring your legal team’s technological maturity
      • Buying a small business franchise? Pros and cons of franchising vs. starting a business
      • Common Market Law Review – A journal for all seasons
      • Choosing the best time to open or close a business
      • The inner workings of AI: A guide for lawyers
      • The ESG Ready Lawyer: K&L Gates Partners Sean Jones and Julie Rizzo discuss ESG issues in today’s highly politicized environment and challenges they create for companies across the board
      • Midsize law firms move into a strong position relative to Biglaw
      • What every small business needs to know about the Corporate Transparency Act and Beneficial Ownership Information Reporting
      View All Expert Insights
    1. Back to Home >
    2. Back to Expert Insights >
    3. IRS submits report to Congress, plans a 2024 limited Direct ...
    The right cloud tax preparation softwares helps you serve your clients better.
    Tax & AccountingMay 19, 2023

    IRS submits report to Congress, plans a 2024 limited Direct File Tax Return Prep pilot

    By: Mark Friedlich, ESQ., CPA

    The Internal Revenue Service submitted a report to Congress on May 16, 2023, evaluating a Direct File option for taxpayers and is taking steps to begin a pilot project for the 2024 filing season. 

    The report to Congress, required by the Inflation Reduction Act, evaluated the feasibility of providing taxpayers with the option of a free, voluntary, IRS-run electronic filing system, commonly referred to as “Direct File.” 

    The report focuses on three areas: taxpayer opinions, cost, and feasibility. It includes an analysis conducted by an independent third party, as required by the statute. The report also lays out the potential benefits and challenges associated with the IRS implementing a Direct File program. 

    What about the current IRS Free File option? 

    The IRS does currently offer a Free File Fillable Forms option in conjunction with its Free File program, but relatively few taxpayers use it. House Ways and Means Committee Chairman Richard Neal, D-Massachusetts, thinks the program will encourage more taxpayers to take advantage of free tax prep options.  

    "When 70% of taxpayers qualify for IRS's current Free File services, yet less than 3% take advantage, it's time for change," he said in a statement. "Today's report provides a framework for saving taxpayers time and money while giving them the experience they deserve."

    Report findings: taxpayer opinions and interest in free Direct File 

    According to the IRS, the report finds that many taxpayers are interested in using a free IRS-provided tool to prepare and file taxes and that the agency is technically capable of delivering a Direct File program.  

    Other findings include that:  

    • Taxpayers are sensitive to cost, privacy, and security in their tax filing choices. 
    • Some taxpayers would be interested in using Direct File specifically because it would be built by the IRS. 
    • Some taxpayers report being concerned about the motives of the IRS in providing a Direct File tool and potential implications for tax enforcement. 
    • Taxpayers who currently self-prepare their taxes, are younger, or have limited English proficiency, are more likely to be interested in a Direct File tool. 
    • Taxpayers are least likely to adopt a Direct File option when they are comfortable with their current filing option. 
    • Taxpayer preferences regarding Direct File tend to be based on the assumption that a Direct File option would be about the same as or easier to use than other tax preparation software.  

    Report findings: Direct File option estimated costs 

    The report concludes that effective execution of a Direct File program would require sustained budget investment and careful management of the potential program's operational complexity.  

    Specifically, annual costs of Direct File were estimated to range from $64 million (assuming 5 million users and a narrow scope of covered tax situations) to $249 million (assuming 25 million users and a broad scope of covered tax situations).  

    The IRS states that customer support accounts for more than half of the cost in all scenarios and 84% of the cost in the 25 million users broad scope scenario.  

    Report findings: Free Direct File feasibility 

    The study highlights several operational challenges that the IRS must address if a decision were made to implement Direct File. These challenges include: 

    • Fostering technical product development expertise within the agency. 
    • Developing customer service capabilities to support taxpayers using the product. 
    • Coordinating with states and other stakeholders to support state tax administration.  

    It is unclear if Direct File would coordinate with state and local income tax returns. Failure to do so would force taxpayers to essentially do their income tax returns twice – once using the IRS system and another with existing private company software. 

    In an interview, former IRS Commissioner Charles Rossotti questioned whether Direct File is a good use of the agency’s resources, given the necessity to provide ongoing support for taxpayers with questions about filing their returns. “The last thing the IRS needs is more phone calls,” he said. He suggested it would make more sense to just cover the fees taxpayers pay for using private company software. 

    However, former commissioner Dave Kautter is quoted as saying the plan would fill an important gap in the tax system. “It is irrational that a taxpayer can’t file a tax return electronically directly with the IRS unless they go through a commercial software vendor.” 

    Does the IRS have the legal right to create the program? 

    The legality of the IRS direct-file tax preparation pilot program is a complex issue. There are a number of legal questions that need to be addressed, including: 

    • Does the IRS have the authority to offer a free direct-file tax preparation program? 
    • Does the program violate the anti-trust laws? 
    • Does the program violate the privacy rights of taxpayers? 

    The IRS has said that it believes that the program is legal. However, it is possible that the program could be challenged in court.  

    Political tailwinds

    Many Republican members of Congress believe that the IRS should not act as a tax preparer, tax collector, and tax enforcer and question the legality of the Direct File program.  

    On the other hand, Democratic Congressional leaders and the administration believe the IRS has the legal authority to create such a system and believe it is a critical piece of simplifying the taxpayer experience and giving greater access to free tax return filing tools to underserved communities around the country. 

    The report: how data was gathered and the basis for IRS findings  

    The IRS report includes data from multiple sources. The report relied on information from the agency’s Taxpayer Experience Survey (TES), which surveyed thousands of taxpayers on these topics. The IRS also reviewed and incorporated findings from an independently conducted survey by the MITRE Corporation. 

    Data from the taxpayer surveys was supplemented with user research and usability testing, conducted using a basic internal prototype to better understand first-hand taxpayer perspectives.  

    The report also includes a separate, independent analysis done by New America and Professor Ariel Jurow Kleiman on the Direct File concept. 

    What’s next for the free Direct File pilot?

    As directed by Treasury, the IRS will move to gather further information through the implementation of a scaled Direct File pilot in the 2024 filing season to further assess customer support and technology needs and the ability to overcome the potential operational challenges identified in the report. Additional details on the Direct File pilot will be available in the coming months. 

    “The IRS is committed to delivering significantly improved services by providing taxpayers with tools, information, and assistance to make it easier to comply with their tax filing obligations. Direct File – used by numerous tax jurisdictions around the world – has long been discussed as an option for improving the customer experience for taxpayers in the U.S.,” said IRS Commissioner Danny Werfel.  

    “The IRS review looked at the potential operational and administrative requirements of such a system. Ultimately, the results show there is taxpayer interest in an optional Direct file program and such a program is technically feasible. Any path forward should start with a limited pilot to assess operational factors described in this study.” 

    Werfel makes clear that any IRS program would supplement, not replace, private-sector options.  

    “Taxpayers will always have choices for how they file their taxes,” he said. “People should use the filing option that works best for them.” 

    Read the Commissioner’s entire letter to Treasury Secretary Janet Yellen that accompanied the Direct File Report.

    Mark Friedlich
    Mark Friedlich, ESQ., CPA
    Vice President of US Affairs for Wolters Kluwer Tax & Accounting
    Mark Friedlich, a CPA & tax lawyer, is the Vice President of US Affairs for Wolters Kluwer Tax & Accounting. He is a member of the U.S. Senate Finance Committee’s Chief Tax Counsel’s Advisory Board, advisor to 14 state taxing authorities, and has been a member of the American Bar Association’s Tax Section and AICPA’s Tax Section leadership teams. Prior to joining Wolters Kluwer he was a COO and Principal at PwC.

     

    Explore related topics
    Expert insightsTax newsFederal Tax News and LegislationTax Preparation
    Tax Software Solutions

    In the cloud or on premise, find the solutions you need to supercharge your tax preparation productivity.

     
     
    Professional Tax Software
    Find the right solution for your firm
    CCH Axcess™ Tax
    CCH® ProSystem fx® Tax
    ATX™ Tax Software

    Related insights

    IRS still has millions of tax unprocessed returns; timeline, what to do, where to check
    IRS still has millions of tax unprocessed returns; timeline, what to do, where to check 3 steps to developing a successful advisory services model for your accounting firm IRS chief acknowledges audits of black taxpayers may be unfairly high

    Related Insights

    • IRS still has millions of tax unprocessed returns; timeline, what to do, where to check
      Article
      Tax & Accounting
      May 23, 2023
      IRS still has millions of tax unprocessed returns; timeline, what to do, where to check
      As of May 13, 2023, the IRS had 4.2 mil unprocessed individual returns, 2 mil need error correction or special handling, 2.2 are paper returns
      Learn More
    • Disaster tax relief and effects on Individual Retirement Accounts
      Article
      Compliance
      Tax & Accounting
      May 19, 2023
      Disaster tax relief and effects on Individual Retirement Accounts
      Deadlines apply to performing certain IRA-related actions. In the case of a disaster declaration, of which there have been many thus far in 2023, the IRS will extend certain deadlines, resulting in additional time for many actions to be completed.
      Learn More
    • 3 steps to developing a successful advisory services model for your accounting firm
      Article
      Tax & Accounting
      May 18, 2023
      3 steps to developing a successful advisory services model for your accounting firm
      Learn how your accounting firm can create and price advisory service packages, communicate with, and transition clients to a new business model.
      Learn More
    • Tax relief for California victims of storms, winds, flooding, landslides, and mudslides
      Article
      Compliance
      Tax & Accounting
      May 16, 2023
      Tax relief for California victims of storms, winds, flooding, landslides, and mudslides
      Due to destruction caused by severe storms, winds, flooding, landslides, and mudslides that occurred in parts of California beginning on Feb. 21, 2023, the Internal Revenue Service (IRS) has announced that affected taxpayers will receive tax relief.
      Learn More
    Footer Navigation
    • About Wolters Kluwer
    • Strategy
    • Our Organization
    • Management
    • Supervisory Board
    • Value Creation
    • News & Press Releases
    • Events
    • Solutions Directory
    • Health
    • Tax & Accounting
    • ESG
    • Finance
    • Compliance
    • Legal
    • Expert Insights
    • Careers
    • Investors
    • Sitemap
    • Site Owner
    Follow Wolters Kluwer US
    • Facebook
    • Twitter
    • LinkedIn
    • Instagram
    • YouTube
    Wolters Kluwer Logo

    When you have to be right

    • Terms of Use
    • Privacy & Cookies

    © 2023 Wolters Kluwer N.V. and/or its subsidiaries. All rights reserved.

    Back To Top